Horizontal clustering involves running multiple Java application servers across two or more separate physical machines, with the application servers divided between the machines - for example, having the admin server and two managed servers on one machine and two additional managed servers on a second machine. The document then provides step-by-step instructions for installing WebLogic server on both machines, creating a domain across the machines, assigning managed servers to clusters on each machine, and starting up the node managers and servers on each machine to complete the horizontal cluster configuration.